Question: Consider the following two mutually exclusive alternatives for reclaiming a deteriorating inner-city neighborhood (one of them must be chosen). Notice that the IRR for both alternatives is 27.19%.
a. If MARR is 15% per year, which alternative is better?
b. What is the IRR on the incremental cash flow [i.e., ?(Y - X)]?
c. If the MARR is 27.5% per year, which alternative is better?
d. What is the simple payback period for each alternative?
e. Which alternative would you recommend?